International Airlines Group (IAG) swung to a €147 million ($201 million) net profit in 2013, compared to a €696 million net loss in 2012, boosted in part by Iberia’s ongoing restructuring.
British Airways posted a full-year operating profit of €762 million, while Iberia stemmed its operating loss at €166 million. Meanwhile, newly acquired Vueling delivered an operating profit of €168 million from the date of its acquisition by IAG in April 2013. IAG CEO Willie Walsh described the performance as a “strong financial recovery and return to profitability.”
Over the 12 months ended Dec. 31, 2013, IAG’s revenues rose 3.1% to €18.6 billion, while costs fell 1.3% to €18 billion. This delivered a €527 million operating profit after exceptional items, marking a drastic improvement from the €613 million operating loss it posted in 2012.
Before exceptional items, the 2013 operating profit stood at €770 million, up from a €23 million prior-year loss.
Traffic was up 5.8% at 186.3 billion RPKs, off the back of a 5.2% increase in capacity to 230.6 billion ASKs, producing a load factor of 80.8%, up half a point. Yield remained stable at 8.73 cents, while as RASK increased 0.6% to 7.05 cents and CASK decreased 6.2% to 7.77 cents. CASK ex-fuel was 5.18 cents, down 5.6%.
“Iberia has made huge progress on cost control as its restructuring takes shape,” Walsh said. “The recent pay and productivity agreements between Iberia and its pilot and cabin crew unions are key to reducing the airline’s costs further and providing the foundation for profitable growth.”
In 2014, IAG is aiming to make “steady progress” toward its €1.8 billion 2015 group-wide operating profit target. It is forecasting “relatively flat” unit revenue growth, with margins being driven by lower unit costs.